The Budget stays the course set in previous Budgets. Government’s priorities remain unchanged. It is using its Building Growth Agenda as a framework for building a more competitive economy and its Result Areas as a framework for Public Sector Spending. It continues to focus on spending which it considers will achieve better results. The spending however remains constrained.
If your business is R&D heavy, in the tourism sector, or working in residential or commercial construction in Auckland or Christchurch, there is some good news in this Budget for you. For other business, a reduction in ACC levies is really the only material change. This is particularly noticeable for the export sector which sees little direct attention in the Budget.
This Budget is notable for its shift into social areas, on alleviating poverty, social housing and education, which have been on the priority list for Labour and the Greens.
It therefore remains a political document, with an eye on next year’s election. It reinforces that, even as new money starts becoming available, this is a Government that does not believe in interventionist initiatives – most of the shifts referred to above are regulatory in nature. This is in increasingly stark contrast to the emerging policy positions of the major Opposition parties